The good folks at JoeLong2Cleveland (who are trying to get Joe Long of the Four Seasons inducted into the Rock Hall with the founding members), have posted a letter from Terry Stewart, the President of the Rock & Roll Hall of Fame and Museum. The letter explains how the Rock Hall process theoretically works:

Nomination and induction into the Hall of Fame is not about popularity, records sales, which label the group is on, or anything other than the process below. The love for, the evaluation of, and the impact of any artist are subjective questions to be answered by the nominators and the voters. Unlike baseball, football, basketball or hockey, statistics are not relevant. Please read below:

The entire nomination and induction process is coordinated by the Rock and Roll Hall of Fame Foundation in New York City. Individuals can be inducted in four categories: Performer, Early Influence, Non-Performer and Side-Men. The only formal criteria for the performance category is that an artist has to have had their first record 25 years ago. That said, candidates are reviewed and discussed relative to their impact on this music that we broadly call rock and roll. The innovation and influence of these artists is also critical. Gold records, number one hits, and million sellers are really not appropriate standards for evaluation.

The formal selection of Performers begins with an extensive panel of journalists, historians, previous inductees, noted musicians, industry heads, etc. In turn, those nominated are sent to a committee of more than 800 people around the world (journalists, historians, music industry management, all previous inductees, musicians, etc.) who vote. Those receiving the highest number of votes and more than 50% of the votes cast are inducted into the Hall. Usually, this means five to seven new performing members each year. So you can see the road to being inducted is an arduous one and for the most part, removed from the realm of influences or politics.

The key phrase in there is "innovation and influence." If that doesn't describe the artist you support, it's probably unlikely they'll make it in. It's also interesting to note that they actively reject record sales data as a criteria for induction.